That 7 Year Rule You Heard is a Bunch of GARBAGE

If we are ever going to get the economy back on track, we need for Americans to get back into home ownership. With literally millions of people having gone through a foreclosure, short sale, bankruptcy or deed in lieu it is important to know how long it will be before they can buy again.

The Bad, The Worse, and the Ugly

According to an article in the New York Times, Foreclosure was the worst derogatory mark when it came to earning the ability to purchase a home again.  I have long believed this to be true and have written about it before here.  But when you get a spokesman from Fannie Mae to say “The key is to avoid the foreclosure, that is what will help you be eligible for the shorter period”, it is clear that we need get this message out.

And Now For the Shocker…

FHA homeowners who have elected to complete a short sale and have been current for the previous 12 months may be eligible to purchase again immediately.

Did you catch the little factoid in there?You CAN do an FHA short sale without being in foreclosure, or even being late on your payments.

You CAN qualify to purchase another house immediately after.

These statements of course come with a lot of fine print. Is there a hardship that is forcing you to move? Have you maintain the payments on your other debt? The bank wont take a loss unless there is a reason to.  But its refreshing to know that this is available.

Clean up after yourself…

In every case, the credit history since your hardship will greatly effect your ability to purchase a home again.  An underwriter will want to see that you have been a model citizen and that your past does not continue to haunt you.  If you can keep your nose clean for 2 years after a short sale, you can get back into a home.

The current programs that are available for a short sale such as Chase’s Short Sale Outreach Program, and the HAFA short sale program are even more reason to make a short sale a great option for homeowners who are not able to stay in their home.

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